Five Years Ago, You Took Out a 30-Year Mortgage with an APR

question 88

Multiple Choice

Five years ago, you took out a 30-year mortgage with an APR of 6.5% for $200 000. If you were to refinance the mortgage today for 20 years at an APR of 4.25%, how much would your monthly payment change by?

• A)The monthly payment will increase by $104.79.
• B)The monthly payment will decrease by $343.12.
• C)The monthly payment will decrease by $104.79
• D)The monthly payment will increase by $343.12.

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Definitions:

Legal Steps

Sequential actions or procedures that are taken in accordance with law to achieve a legal outcome, such as filing a lawsuit or executing a contract.

Collateral

Assets or property offered as security for the repayment of a loan, subject to seizure on default.

Proceeds

The amount of money received from a sale or transaction, often after deducting costs or expenses.

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to make the required payments.